Hi Folks
Sorry, yet another question.
We do the bookkeeping for a sole trader who works from his home. He repairs IT/Office eqpt.
Anyway, he has a bedroom in the house he uses, but has decided to build an extension. He is going to have the upstairs part of the extension to extend his bedroom as I understand it and downstairs will be for his workshop/office.
The client is VAT registered.
From a bookkeeping point of view, does anyone know how to account for this?
Thanks, Jon
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For book keeping purposes. Dr capital expenditure. Cr Cash. Then probably Dr cash. Cr Long term loan.
For VAT have you read VAT guide 700 section 12.2. This link might work:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.por...
For use of home as office, this reads like a capital improvement and would therefor not be included.